Scotland's most famous shortbread brand feels pinch despite post-pandemic sales surge

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Iconic Scottish shortbread maker Walker’s has seen its profits squeezed despite enjoying a double-digit sales surge as the global travel market rebounded following the pandemic.

Annual results for the family-owned Speyside food business show that top-line growth was fuelled by the key UK and US markets, the former resulting from a strong post-pandemic festive season. The accounts for the year to the end of December 2022 reveal a 16 per cent year on year jump in turnover, to £164.6 million.

The Aberlour-headquartered firm benefitted from increased sales in domestic and overseas markets during the trading period, with UK sales increasing by some 23 per cent, from £62.6m to £77m, and export revenues rising by almost 10 per cent to £87.6m. Growth was underpinned by a successful rebrand, which launched in 2021 and continued through last year, with a strong performance in global travel retail coinciding with a return to air travel for many passengers.

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However, “ongoing pressures” on global supply chains - intensified by the conflict in Ukraine - and a challenging inflationary environment impacted the business, as costs of raw materials rose and service levels were squeezed. As a result, operating profits dipped to £6m from £6.2m in the previous trading year. The company sought to mitigate these challenges by introducing “new production efficiencies and procurement strategies”, both of which contributed gains in the year.

Four times winner of the Queen’s Award for Export achievement, Walker's exports its famous bakery products to some 100 countries.Four times winner of the Queen’s Award for Export achievement, Walker's exports its famous bakery products to some 100 countries.
Four times winner of the Queen’s Award for Export achievement, Walker's exports its famous bakery products to some 100 countries.

Managing director Nicky Walker said: “It was pleasing to see demand return in a substantial way through 2022 after a couple of challenging years during the pandemic. The year presented numerous hurdles however, not least the continuing restrictions in the local labour market, but also substantial price increases coming from our suppliers. This volatility forced a review of all our incoming costs, with proactive conversations held with our entire supply chain.”

Walker, who was appointed to the board in 2007 as production director, and is said to have been instrumental, working alongside his late father, Joe, in developing the company’s facilities in Aberlour and Elgin, said that despite the challenging global environment, a post-pandemic lift and return to travel and tourism was key to achieving top-line growth, along with the brand relaunch, which is continuing in 2023 and 2024 as part of a global roll out.

He said: “The Walker’s brand relaunch was exceptionally well received last year, and we are excited at the prospect of the continued roll out through the remainder of this year and into next as we look forward to supporting the business’ aspiration for sustainable growth.

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“I’d again like to acknowledge the support of our incredible team, whose efforts are invaluable to the business. It was especially pleasing that as part of our 125th anniversary celebrations in June we were able to say thank you to them in person, along with their families, at a company event.

“I, along with the board and executive committee, continue to focus our efforts on moving the business forward, further developing it for a bright, sustainable future,” Walker added.

Four times winner of the Queen’s Award for Export achievement, the firm exports its famous bakery products to some 100 countries.

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